Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue increased both sequentially and year-over-year, but operating cash flow declined from the prior quarter, causing free cash flow and margin to weaken sequentially. Compared with the same quarter last year, free cash flow and margin improved.
- Operating cash flow as a share of revenue decreased from the prior quarter, though capital expenditure was significantly lower. The resulting free cash flow margin was higher than a year ago but lower than the immediate past quarter.
- Sequentially, cash conversion weakened with lower operating cash flow and a narrower free cash flow margin. Year-over-year, cash conversion improved as operating cash flow, free cash flow, and margin all increased.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$583.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$155.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$155.7M
Cash generated by operations before capital spending.
CapEx
$635000
Capital spending and related asset purchases.
FCF margin
28.9%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-11-30 | $504.8M | $106.6M | $18.0M | $88.7M | 17.6% |
| 2023-02-28 | $515.1M | $164.7M | $17.5M | $147.2M | 28.6% |
| 2023-05-31 | $529.8M | $218.6M | $26.0M | $192.6M | 36.3% |
| 2023-08-31 | $535.8M | $155.7M | $635000 | $155.0M | 28.9% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 238.1% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.1% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$1.2B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Decline in operating cash flow
Operating cash flow decreased from the prior quarter even as revenue rose, reducing free cash flow and margin. Capital expenditure was substantially lower, but the drop in operating cash flow outweighed that benefit.
The lower operating cash flow was the primary factor behind the sequential contraction in free cash flow and margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow as a share of revenue decreased from the prior quarter, though capital expenditure was significantly lower. The resulting free cash flow margin was higher than a year ago but lower than the immediate past quarter.
Sequentially, cash conversion weakened with lower operating cash flow and a narrower free cash flow margin. Year-over-year, cash conversion improved as operating cash flow, free cash flow, and margin all increased.
The filing notes a share repurchase arrangement adopted after the quarter end, which will influence future cash allocation.